Recently, a guy in a Facebook group I belong to was saying how he found Lumberjack pellets for $5/20lb bags and bought a whole bunch. Another guy who works for one of the most popular pellet grill makers around came on and told the guy he should use them quickly that they don't last much more than a year. Funny, I've got pellets that are probably 6 years old and still work just fine.
The only time I ever had a pellet go bad, was when it was left out in a area that at times received direct sunlight and yet other times was in the shade. Condensation occurred within the plastic container they were in, the pellets started to fall apart when they had made contact with the condensation.